Major Tax Cuts Proposed For Businesses, Families
This information is provided courtesy of 28th District State Sen. MD Joey Hensley R-Hohenwald, who represents Giles, Lewis, Marshall and Maury counties.
The Tennessee Works Tax Reform Act of 2023 is advancing in the Senate and cleared the Senate Revenue Subcommittee with a positive recommendation.
This legislation proposes changes to Tennessee’s tax code to lower the tax burden on businesses, boost Tennessee’s economic competitiveness, promote entrepreneurship and small business formation, and provide targeted relief to families.
This is one of Gov. Bill Lee’s top legislative initiatives for 2023.
Tennessee is committed to low taxes, and businesses and citizens can best decide how to spend their money, and this tax-cut proposal demonstrates that we practice what we preach. Lee’s proposal is to provide more growth opportunities for businesses and financial relief for families on every-day expenses.
Tennessee is proud to be one of the lowest taxed states in the nation, and this move to further cut taxes strengthens our dedication to being a pro-business and pro-family state with low taxes.
The tax cuts would provide significant relief to small businesses by lowering the burden of the franchise and excise tax and the business tax rate.
Under the proposal, more than 23,000 small businesses will have their excise tax liability reduced to zero by exempting the first $50,000 in income from the state’s excise tax. It also exempts up to $500,000 of business property from franchise tax liability.
The tax cuts would exempt 140,000 Tennessee businesses from the business tax by raising the threshold for business tax exemptions from $10,000 to $100,000 of gross receipts. In addition, it reduces the highest business tax rate from 0.3% to 0.1%.
The proposal will also help Tennessee lead the nation in economic competitiveness, while prioritizing Tennessee businesses.
It incentivizes businesses to hire Tennesseans and headquarter in Tennessee by changing the way the excise tax is calculated to favor businesses with a higher percentage of their properties and jobs located in Tennessee than in other states.
It also ensures state tax deductions for research and development (R&D) expenses – which help companies grow, innovate and produce superior products and services.
This move comes after the federal government ended yearly research and development tax exemptions for businesses. The measure also removes unfair taxes on certain manufacturing facilities with unsold inventory.
Finally, the proposal will deliver for working families by creating a three-month sales tax holiday on food during August, September and October 2023.
It also seeks to incentivize businesses to provide paid family leave to employees by establishing a state paid family leave franchise and excise tax credit on wages paid for a two-year pilot period.
Senate Bill 281 would each year increase the base salary for teachers until it reaches $50,000 in the 2026-2027 school year.
The bill would also end the practice of local school district deductions for national, state and local labor organizations. Currently, school districts are permitted to provide these unions with a free benefit of collecting dues on their behalf.
Taxpayer resources in K-12 education should not be used to support these activities, whether political or otherwise, of any organization, including labor unions.
The legislation does nothing to restrict a teacher’s choice to join and fund any activity by the union; it simply ends the practice of using taxpayer resources to fund the collection of dues for the union’s benefit.
Sen. Hensley may be contacted at 425 Rep. John Lewis Way N., Suite 742, Nashville ,TN 37243, or by calling 615-741-3100, or toll free 1-800-449-8366 ext. 13100, or by faxing 615-253-0231.
His district address is 855 Summertown Highway, Hohenwald, TN, 38462. His telephone number is 931-796-2018, his cell phone is 931-212-8823 and e-mail: firstname.lastname@example.org